Top Hat Announces $55 Million Series D to Scale Operations

Top Hat, the Toronto-based OER platform, said it had raised a Series D funding round worth $55 million on February 4th. Led by previous investors Georgian Partners and Inovio Capital, the round involved both debt and equity financing. The company also used the opportunity to announce plans to expand their partnerships with Bluedoor Publishing and Fountainhead Press. Top Hat otherwise says it will use the funds to continue and expand its existing work.

Current investors Emergence Capital, Union Square Ventures, and Leaders Fund also participated in the round. BMO Technology and Innovation Banking Group provided debt financing.

Top Hat Series D Involves Equity and Debt Financing to Scale Operations

“Higher education is undergoing a sea change brought on by the massive price of a degree, combined with an economy undergoing radical transformation,” said Top Hat CEO and founder Mike Silagadze, in a statement. “This has created a demand to raise the impact of educational outcomes. With the support and confidence of our investors, customers, and employees, Top Hat will continue building on the exponential growth we’ve achieved to empower professors to work smarter and more effectively so they can improve the educational return on investment for their students.”

Top Hat’s platform allows educators to put open educational resources (OER) to work with less involvement on their end. It allows educators to pull OER into assigned texts, lecture slides, homework, and assessments. In addition, the platform provides educators with the tools to author OER and edit existing texts.

Recently, Top Hat has been working with Fountainhead Press and Bluedoor Publishing to digitize their print courseware. The company says the funding round will allow them to scale these operations and pursue more partnerships with print publishers.

Finally, Top Hat has been moving into course curation as well. This year, the company has begun to launch Top Hat Intro Courses. These focus on common introductory undergraduate courses and provide educators with preselected OER course material, along with their resulting homework, quizzes, assignments, and tests. To date, the company has created six of these, and they plan to continue developing them with the increased funding.

“As university students rebel against ridiculous textbook prices much as music consumers did in the early 2000s, Top Hat has emerged a visionary leader by bringing students and educators together in a collaborative digital teaching and learning experience that improves outcomes while reducing costs,” said Inovia Capital Partner Shawn Abbott, in a statement. “My partnership is proud to be part of the massive societal impact of building an enduring, trusted platform on which our children are being better educated, affordably.”

The Potential of OER

As of the announcement, 2.7 million students have used Top Hat in a course. The platform has been used by 750 institutions in North America.

As the price of college textbooks has risen drastically in the last two decades, more educators have begun to look to OER as a more affordable option for students who are already struggling with the high cost of higher education. Researchers have recently investigated how OER might improve equity in higher education, and numerous organizations, government initiatives, and companies have begun to focus on openly licensed material.

But while this sidesteps the incumbent publishing companies that have raised prices at several times beyond the rate of inflation, OER can also be poorly edited or out of date. Using it exacts a greater deal of energy on a professor who could otherwise ask her students to buy an off-the-shelf product from the campus bookstore.

The value proposition offered by Top Hat and similar companies is to make that curation, editing, and course creation easier while using OER.

Featured image courtesy of Top Hat.